CNW: Teens No Longer Receiving First Vehicle Choice; Parents More Likely to Pay Cash
BANDON, Ore. — Back in 2005, 91 percent of male and 93 percent of female teens received their first vehicle choice. However, in 2010, this is no longer the case.
According to CNW Research, this figure dropped to 76 percent and 55 percent, respectively.
"Quite clearly from the data there is a distinct move to putting teens into less expensive vehicles," highlighted Art Spinella, of CNW.
In fact, Spinella indicated that teens are getting smaller vehicles and they are more likely to get their second or third vehicle on their wish list.
"Reflecting that shift, the share of teen new-vehicle sales that are large or compact SUVs has fallen from 33.8 percent to 23.96 percent in the same time frame," he pointed out. "Large SUVs took the biggest hit dropping from 4.1 percent to less than 1 percent."
Overall, teens are getting more budget and compact vehicles from their parents. Spinella said these sales have more than doubled.
In general, vehicles for teens are 60 percent of the industry's average transaction price, coming in at $26,841. This compares to 65.7 percent in 2005.
"And while the average industry transaction price hasn't changed much since 2005, teen-vehicle transaction prices are down around $1,800," Spinella reported. "This also translates into the higher percentage of vehicles that are paid for with cash — up 11 percentage points this year versus 2005."
In another interesting trend, a slightly higher percentage of parents are apparently making full payments for these vehicles for teens, while a larger share of teens are making partial payment to their parents. One of the key reasons? Working teens have fewer work hours, Spinella said.
"For this year, teen sales will represent roughly 1.95 percent of total sales, compared to 3.6 percent in 2005, with a larger percentage of those teen sales going to females," he concluded.